Australia faces direct and growing competition from Chinese universities for international students, with more foreign students from growth markets enrolling in engineering, medicine and business courses in China.

The warning comes as the British Council’s education intelligence unit forecasts a slump in university-age Chinese students, declining by 35 million between 2012 and 2025.

Researcher Zainab Malik said Australia had to look beyond China and India to emerging economies in Latin America, central Asia and Africa, where demographic and economic change offered big opportunities.

“There will be Chinese students always coming to Australia ... but if you look at the source markets we’re all in the same region and we’re all sourcing from the same countries, so Australia does need to diversify,” Ms Malik said.

She said with falling numbers of Chinese students and China’s capacity and quality rising, universities there posed a threat to Australia’s market.

Education is Australia’s third largest export, contributing more than $18 billion to the economy in the last financial year. Chinese students made up more than 30 per cent of incoming tertiary students, followed by India with about 7 per cent.

However, Australian educators considering diversifying will meet competition from Chinese universities, according to Melbourne-based RMIT’s international business unit.

The unit’s figures show that while the number of foreign students in China in 2002 equalled 42 per cent of Australia’s total, this had risen to be nearly equal in 2014.

This reflected a near doubling of engineering enrolments at Chinese universities and 40 per cent increases in the number of business and medicine students in the past three years.

Thomas Eastwood, head of RMIT international business intelligence, said: “Australia’s core markets will remain its core markets, but moving forwards it will need to diversify where it gets it students from, and typically those markets are where China is already recruiting heavily.”

A comparison of similarly ranked universities showed fees of $36,700 for international students at Australian universities compared with just $5700 Chinese universities. (The Australian)